International Steels Limited: Estimates largely maintained; upgrade to Buy – By IMS Research

<ul><li><span style="font-family:Arial, Helvetica, sans-serif;font-size:medium;">We largely maintain our estimates for ISL following in-line FY17 results. We have marked-to-market our CRC-HRC spread assumption for FY18, but this is partly offset by higher utilization of galvanized facility going forward. Valuations are undemanding at FY19F P/E of 7.7x with a 3yr EPS CAGR of 35%. We thus upgrade our stance to Buy.</span></li><li><span style="font-family:Arial, Helvetica, sans-serif;font-size:medium;">1HFY18 will show some recovery in margins as spreads, which had bottomed out in June, are back on a rising trajectory. Moreover, as winter approaches, spreads normally witness a surge due to sluggish global demand for HRC.</span></li><li><span style="font-family:Arial, Helvetica, sans-serif;font-size:medium;">We do not see any major thr...